China Loves Xiaomi Phones. Will Anyone Else?

Lei Jun of Xiaomi celebrates the third anniversary of the phone's release in Beijing on April 9, 2013. Close

Lei Jun of Xiaomi celebrates the third anniversary of the phone's release in Beijing on April 9, 2013.

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Photographer: Imaginechina/Corbis

Lei Jun of Xiaomi celebrates the third anniversary of the phone's release in Beijing on April 9, 2013.

Lei Jun must be feeling pretty confident right now. The CEO of Xiaomi has taken the Beijing-based company from inception to become one of the top smartphone makers in the world's largest mobile market in less than four years. Lei expects the company to more than double its smartphone unit sales this year to at least 40 million.

Xiaomi's next stop is Singapore, according to a post on Google+ by Hugo Barra, a vice president at the company. (In case you're wondering why he chose to make the announcement on Google's social network, it's because he used to work there.) After expanding into Taiwan and Hong Kong last year, Singapore will be Xiaomi's first foray outside of Greater China, and it should be a humbling experience for Lei.

Few Chinese technology companies have managed to recreate their success elsewhere. Singapore isn't a make-or-break market — the country's population is 5.3 million, smaller than Hong Kong and less than half the size of Beijing — but it's an important test for Xiaomi.

Singapore's mobile market doesn't have a lot in common with China. The country is saturated with smartphones, which account for 92.1 percent of the mobile phone market, according to data from research firm IDC. Apple is the No. 2 smartphone maker in Singapore, with 25.8 percent. In China, Apple struggles just to stay in the top five. In fact, Xiaomi actually surpassed the iPhone for a short time last year.

Cultivating a devoted following through social networks and word-of-mouth is Xiaomi's special sauce, according to Jenny Lee, a partner at GGV Capital in China and an early investor in Xiaomi. The startup has more than 30 million users, and the brand affinity is off the charts. In China, Xiaomi "fan boys" evangelize for the Android phones, which use custom software with its own app market. "The Xiaomi strategy is really all about a fan base," Lee said in an interview.

Going into a new country, especially an island nation, is almost like starting from scratch. Xiaomi has created a separate Xiaomi Singapore page on Facebook that has about 2,700 "Likes." Compare that with the 476,000 Likes on the main Xiaomi page, which is an even more impressive number when you consider that nobody really uses Facebook in China. Liu Wei, a spokesman for Xiaomi, didn't respond to a request for comment about the company's plans for expansion in Singapore or elsewhere.

Xiaomi's quick expansion throughout China has bought Lei and his design-obsessed team the benefit of the doubt. Yu Yongfu, the CEO of the Chinese mobile browser maker UCWeb, lists Xiaomi alongside Tencent and Alibaba as China's leading tech companies. "Xiaomi is a miracle worker," Yu said in an interview.

Whether Lei can work a miracle outside of China may not matter that much right now. Researcher Canalys estimates Xiaomi's market share in China to be about 6 percent, which leaves the company with strong momentum and plenty of room to grow on its home turf.

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